Tuesday 7 June 2011 09.53 EDT
First published on Tuesday 7 June 2011 09.53 EDT

Cloud-based consumer data services might not be new, but the iCloud service Apple announced last night marks a major step towards the mainstream.

Returning from sick leave for the string of announcements at Apple's World Wide Developer Conference, chief executive Steve Jobs made the most significant statement of the night: "We're going to demote the PC and the Mac to just be a device – just like an iPad, an iPhone or an iPod Touch. We're going to move the hub of your digital life to the cloud."

Veteran Apple commentator John Gruber said that "demotion" of the Mac will come to define a new era for Apple.

"iCloud will shape the next 10 years the way the iTunes-on-your-Mac/PC digital hub shaped the last 10," he wrote. "This is a fundamentally different vision for the coming decade than Google's. In both cases, your data is in the cloud, and you can access it from anywhere with a network connection. But Google's vision is about software you run in a web browser. Apple's is about native apps you run on devices. Apple is as committed to native apps – on the desktop, tablet, and handheld – as it has ever been."

Piper Jaffray analyst Gene Munster said the move will encourage consumers to stay within Apple's ecosystem of gadgets, from phones to desktop computers. "Apple is increasing the likelihood that consumers buy multiple Apple devices," he told clients.

"What's new is that Apple will be giving away iCloud for free (we had expected it to be priced between $25-$99 a year). This will allow Apple devices to automatically share contacts, calendars, messages, photos, apps, and music purchased on iTunes; sharing non iTunes music will cost $25 a year." Munster compared that the Amazon's Cloud Drive, which could cost up to $200 a year.

For Apple's rivals, iCloud presents a major challenge. Google started offering cloud-based services to the mainstream through its Gmail service in 2004, but Apple's third and soon-to-be-opened data centre in North Carolina puts it ahead, said Forrester analyst Frank Gillett.

"Google is worth watching as a number two player but will struggle to match Apple. Microsoft, with no articulated vision for personal cloud, lags significantly."

Mike Abramsky of RBC said iCloud is likely to be a huge boost for Apple's device sales. "By 'cutting the cord' to the PC, Apple may expand its addressable device market by 4x, addressing the handset users who have a phone but not a PC. We believe we may see new devices in time, based off iCloud services."

The announcement marks a major move for Apple away from the desktop PC as the central hub of digital activity, acknowledging the consumer shift towards mobile phones and iPads. Apple said last night that it has now sold 200m iPhones, iPads and iPod Touch devices, though it was careful to open the event by heralding the success of the Mac computer by saying sales have grown 28% compared to a 1% slump in PC sales.

In contrast to the warm welcome from analysts, Apple's stock fell 1.57% in response to the announcements, with traders apparently unimpressed by the series of software updates and iCloud announcements because they were not backed up by a new iPhone release.